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How Design Thinking Powers Micro-Entrepreneurs

Udhyam Learning Foundation, founded by ex-Flipkart CPO, Mekin Maheshwari, is using design thinking to help micro-entrepreneurs scale and succeed.

The developmental sector is littered with the corpses of failed initiatives, despite the best intentions and adequate resources. The reason can often be traced to a poor understanding of the end-user and their needs.  Projects falter because they have failed to factor in user context or to prototype and solicit feedback. Can design thinking, with its emphasis on empathy and human-centric interventions hold the answer? Udhyam Learning Foundation certainly seems to think so. 

Adopting Design Thinking 

Udhyam was set up in March 2017 by Mekin Maheshwari, ex-CPO of Flipkart, to build ‘entrepreneurial mindsets’.

Maheshwari’s experience in both technology and human resources roles has led him to believe that as economies around the world struggle to provide livelihoods, the solution lies in equipping people to be self-sufficient.  

Udhyam is focused on two broad initiatives: 

  1. Shiksha: A programme to help develop an entrepreneurial mindset in students. This has currently being implemented in one thousand and twenty four Government-run Delhi schools, for close to seven and a half lakh students and in being implemented in phases in Haryana across one hundred and sixty seven ITIs for about sixty six thousand students
  2. Vyapaar: A programme to help small business entrepreneurs scale and succeed. 

Both programmess require a deep understanding of the end-user and the systemic challenges to their progress. Initially for Vyapaar,  the team tried to work directly with vyapaaris (small business entrepreneurs), by pitching the offerings they had to provide. A meeting with Anirban Bhattacharya of UBQT school, which offers a design-thinking curriculum, prompted Maheshwari to re-examine the way they were working. 

“It was the most obvious choice to make”, recalls Supriya Panchangam, Lead, Brand & Advocacy and the first hire at Udhyam. “We work with customers who are influenced by factors that are personal, cultural and systemic. Thus, it is fundamental that we truly understand and empathise with them. And for us, this decision is strategic– it reflects in how we hire and how we problem solve. ”

Intense immersive workshops guided by UBQT followed, resulting in the Udhyam team discarding their previous approach.

“The problem”, says Bhattacharya, “is the solution bias that the best teams will often have.  Traditional methods of research are geared to finding answers in the shape of products or solutions.  A design thinking approach, on the other hand, steps back and puts the person at the centre – one of the reasons why conventional research often yields incremental improvements but not breakthroughs.” 

Vyapaari at the Heart 

The approach that Udhyam has taken with the Vyapaar programme in the last eight months, presents an interesting case study of how development initiatives can be approached to maximise their chances of success. 

Step 1: Empathise 

The first step for Udhyam was to really understand the vyapaaris and the problems they faced.  Two segments were identified – tailoring and laundry. Teams from Udhyam spent twenty days shadowing about thirty vyapaaris engaged in these businesses to immerse themselves in their context and their lives.  A design-thinking approach meant that they had no preconceived questions – the only objective was to observe and understand.  

Step 2: Define 

This part of the process allowed Udhyam to zero in on the segment that could most easily be scaled and this was identified as ironing vyapaaris. These vyapaaris are a common sight in most large cities. They will have a cart or a small shop and a heavy, coal-based iron. They are typically located close to large residential buildings. The following issues were identified after the first phase: 

1. Trust deficit 

The vyapaaris were cynical – they had been approached by several organisations who had not lived up to their promises.

A few even thought that the Udhyam team was sent to spy on them by an online laundry company. 

 2. A non-progressive mindset 

There was a lack of pride in the business, with the vyapaaris feeling that this was their last resort, because they were not qualified for better jobs. The focus was on getting through the day, not thinking about how they could progress or make their business more efficient. 

3. Problems with coal-irons 

The coal-based irons posed several problems. They could not be temperature controlled. They took time to heat up and cool down. Sparks often left singe marks on the clothes. There was a limited number of clothes the vyapaari could iron in one day. Coal supplies are also non-standard and expensive, not to mention, environmentally unfriendly. 

Step 3: Ideate

The ideation process yielded an interesting solution. While an electric iron would have been the first option to come to mind, this was ruled out because of expense and erratic power supplies. Instead, the team settled on an LPG powered iron, where a customised iron box is fuelled by a 5kg commercial LPG cylinder.

This seemed to address the dual needs of controlling costs and increasing efficiency for the vyapaari, in addition to being environmentally friendly and easy to operate.  

The Udhyam team located a manufacturer of LPG powered irons in Meerut and placed orders for the prototyping stage. 

Step 4: Prototype 

Ten vyapaaris were chosen for a two week prototyping trial. The Udhyam team actually funded the iron-box and LPG cylinders themselves, given that it was a completely new concept for the vyapaaris.  

The results of the trial were interesting: 

  • The vyapaaris complained about the weight of the LPG iron boxes and the final products had to be reduced in weight 
  • The iron boxes came with plastic handles, something vyapaaris were not used to and these were later replaced by more familiar wooden handles  

Step 5: Test 

The LPG-based solution was rolled out to one hundred and seventy vyapaaris. Once eighty of these had used the new solution for at least two months, an independent Udhyam team met a randomised 30% sample to assess the results.  

  • An overwhelming majority was using the LPG solution  
  • The vyapaaris reported that the number of clothes they were able to iron had increased by fifty items, translating roughly into an increase in income of Rs.200-300 per day  
  • They also reported a cost reduction of Rs. 2000 per month 
  • The average income uplift per month across the surveyed vyapaaris was Rs. 5300. 

Scaling the solution 

As of January 2020, Udhyam has helped three hundred and fifty vyapaaris adopt the LPG powered solution and the intervention is proving successful. The plan in the future is to have a third party team audit the results. There are benefits like improvements in the vyapaari’s health, that Udhyam is yet to track.  

Scaling supply

As demand continues to grow, Udhyam is encouraging suppliers to scale, as well as get certifications such as ISI certification from Bureau of Indian Standards.

Providing finance

The LPG solution costs Rs. 8500 and to allow the vyapaaris easy access to finance, Udhyam has partnered with Gromor Finance, an NBFC focused on micro entrepreneurs. This has sparked  off a digitisation cycle.

The vyapaaris were hitherto used to borrowing from the local money-lender at usurious rates of interest, often as high as 5%-6% per month. Collections were done in cash, every day or every week. With Gromor, they are accessing loans at 20% per year, and payments are digitally done using UPI fortnightly. 

This journey has brought other learnings to the Udhyam team. Not all vyapaaris are able to make digital payments, so Gromor now provides a printed QR code. A friend or relative with a smartphone and a UPI app, then facilitates the payment. 

Over time, Udhyam and Gromor hope to make the vyapaaris more financially literate and aware of the importance of bank accounts and saving. 

Training ‘Saathis’

Udhyam is now hiring ‘Saathis’, micro-consultants who are fluent in the local language and want to make a career in social services. The Saathis typically have a Masters in Social Sciences or Welfare and after training, engage with the vyapaaris to pitch new ideas, introduce new products and create behaviour shifts. 

Design thinking is paying off

Radhakrishna Karumanchi (RK), Lead at Vyapaar, estimates that there are approximately eight or ten lakh small ironing vyapaaris  in the country. “We want every vyapaari to scale and succeed.  While we are still experimenting and learning, we are confident that a first principles and design thinking approach is great way to make that happen”. 

Word is getting out and RK says a micro entrepreneur from Telangana actually paid the Udhyam office in Bengaluru a visit, to ask how he could implement the LPG solution. 

Maheshwari points to the one big advantage that design thinking is bringing to Udhyam. “Design thinking has enabled us to build a customer-centric culture. As a result, our understanding of customers has become a key strength. ”

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